Arriva said Monday Deutsche Bahn had indicated it was prepared to pay around £1.54 billion for Arriva. Due diligence is largely completed, people familiar with the matter say, and the deal is likely to be approved by Arriva’s board.

Arriva, which operates in 11 European countries, was a uniquely attractive target for the German travel group, analysts say, because of its reach, a point reinforced by continuing speculation that French state-controlled rail operator SNCF, which tried earlier this year to combine its Keolis unit with Arriva, could counterbid.

The European Union is requiring state transport giants like Deutsche Bahn and SNCF to open their passenger networks up to competition. The U.K.’s relatively deregulated market makes it an obvious hunting ground because contracts can be won more freely and there’s greater potential for margin-expansion.

Arriva was the low-hanging fruit for European consolidation. “Arriva was Deutsche Bahn’s only real option to gain a sizeable footprint in Europe,” Karl Burns, an analyst with Shore Capital, said Tuesday. “There aren’t many comparable companies.”